Prakash Industries Ltd (PIL) has acquired coal linkage in the recent coal linkage auction conducted by Coal India Ltd (CIL) for captive power plant.
The Long-Term Linkage will ensure coal supply of 5.43 Lac Tonnes per annum for the next 5 years for its captive power plant located at Champa, Chhattisgarh.
The company will sign Fuel Supply Agreement (FSA) with CIL in the coming weeks and expects the coal supplies to commence from the next month.
Earlier in Mar’17, Prakash Industries had signed Fuel Supply Agreement with CIL in respect of the coal linkages of 0.65 MnT granted for sponge iron operations for a period of 5 years.
Significance of Coal Linkages:
Before acquiring the linkages, coal requirements were met through CIL spot auction, which were 20% expensive compared to coal supply by Linkages.
Hence, to reduce coal cost, the company has shifted its source to Long-Term Linkages which will provide stability and cost savings in operation.
The company will now receive total coal quantity of 13 Lac Tonnes per annum through coal linkages, thereby saving an approx amount of INR 70 crore per annum, as per the statement released by Prakash Industries.
About Prakash Industries:
Prakash Industries is an integrated steel plant with captive power generation in Chhattisgarh.
The company operates its coal-based sponge iron units and steel manufacturing unit at Champa. While finished steel manufacturing unit is located in Raipur.
The company has commissioned its fifth sponge iron kiln during May’17, raising its sponge iron manufacturing capacity to 1 MnT per annum. Also, adding power capacity up to by 15 MW through waste heat recovery boiler without any additional fuel cost.
The total captive power plant capacity has increased to 230 MW, comprising 65 MW through Waste heat recovery route and 165 MW through thermal route, sufficient for captive power requirement of Steel plant.
During FY17, the company has completed modernisation of old furnaces, thus enhancing steel manufacturing capacity to 1.1 MnT per annum. Also, the company has recommisionned its Medium and Heavy structural mill at Raipur to produce Angle, Channel, and Beam. Increasing finished steel plants operation to a level of 1.1 MnT per annum.
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